Avalanche (AVAX) is currently holding steady around the important support level of 22.53 USD on Tuesday, following a more than 9% drop in the previous trading session. This movement comes as the market is still reacting to Grayscale Investments' filing of the S-1 application with the U.S. Securities and Exchange Commission (SEC) to establish the Grayscale Avalanche Trust on Monday. Concurrently, favorable on-chain indicators, from Total Value Locked (TVL) to the daily transaction count growth, are reflecting the increasing vitality of the Avalanche network, thereby reinforcing expectations of a price recovery for AVAX.
Grayscale files to establish Avalanche Trust
Digital asset management company Grayscale just made an important move by officially filing an S-1 registration with the SEC on Monday to launch the Grayscale Avalanche Trust (AVAX) with plans for listing on Nasdaq. This trust is designed to reflect the price fluctuations of AVAX, with Coinbase Custody taking on the role of custodian, while Coinbase, Inc. serves as the primary broker.
Although this move reinforces long-term growth expectations for Avalanche, the announcement has not yet generated enough momentum to create a price breakthrough on the day of release. However, the emergence of large institutions like Grayscale often brings a positive effect: enhancing legitimacy, improving liquidity, and opening doors for traditional investors to access AVAX without needing to hold the token directly.
On-chain signals reinforce optimistic outlook
According to data from Artemis Terminal, the total value locked (TVL) on Avalanche climbed to 2 billion USD on Saturday - the highest this year. This figure indicates a growing influx of capital and activity within the ecosystem, reflecting an increase in user confidence in AVAX protocols.
Notably, the daily transaction count also hit a record high in 2025 with 2 million transactions, indicating an increasing level of interest from the community and a marked improvement in liquidity on the Avalanche network.
Avalanche price forecast: AVAX maintains around important support
AVAX faced strong resistance at the resistance level of 26.46 USD on Sunday, causing the price to plunge more than 9% the following day. By Tuesday morning, this coin was fluctuating around the level of 23.35 USD.
In the short term, the level of 22.82 USD is considered an important support area. If AVAX holds steady and bounces from here, the recovery momentum could bring the price back to challenge the resistance level of 26.46 USD.
However, the current technical signals do not support the bulls. The relative strength index (RSI) on the daily frame has fallen below the neutral level of 50, reflecting that selling pressure is prevailing. To reinforce the recovery trend, the RSI needs to quickly move back above this threshold.
In a worse-case scenario, if AVAX closes below 22.82 USD, selling pressure will increase, potentially pulling the price down to the strong support area at 20.99 USD.